Imperial feasibility for Mt. Polley due March

Imperial, which holds a 33.64% interest and is operator, has commissioned Wright Engineers to prepare the study for the proposed open pit mining operation. It will cover ore reserves, metallurgy, environmental impact, capital and operating costs, pit design, production scheduling and optimization, plus other items. With a current estimated production life of at least 10 years, Imperial and 38.41% owner Corona Corp. (TSE) envi sion a 15,000- ton-per-day mining operation to produce 75,000 oz gold and 32 million lb of copper annually. This calculation is based on drill- indicated mineable reserves totalling 53 million tons grading 0.44% copper and 0.017 oz gold per ton. (A cutoff grade of 0.3% recovered copper equivalent is used.)

The awarding of the study comes some 25 years after the original discovery was made at Mount Polley by a group led by Karl Springer, a noted prospector. The deposit is in the Quesnel Trough, a regional alkalic intrusive complex that hosts other mineral deposits.

The most important mineralized unit is an intrusion breccia which is superimposed by crackle breccia with a stockwork of irregular veinlets, pods and cavities containing magnetite, chalcopyrite and various alteration minerals. The intensity of the copper-gold mineralization is said to be directly proportional to the degree of crackle breccia development.

Since the discovery, a number of companies have examined the Mount Polley deposit for its production potential. But since portions of the deposit have high oxidation levels that impact negatively on copper recoveries, it was viewed as being too metallurgically complex, particularly in times of low metal prices.

During a recent visit to the property, Zarko Nikic, vice-president of exploration, said Imperial’s approach was strategically different from previous operators. The company’s work programs were aimed at outlining a higher-grade copper-gold deposit with a lower average oxidation level within the known widespread tonnage of low- grade copper-gold material.

At the onset, Mount Polley was reported to have some 128 million tons of subeconomic (0.31% copper and 0.012 oz gold) reserves with oxidation levels ranging from 5% to 90%. But Nikic said the company’s drill programs successfully outlined a smaller, higher-grade core with an average level of oxidation of 28%.

“We have a good handle on the distribution of oxide copper in this deposit,” he said, adding that metallurgical testwork indicates recoveries of 73.8% for copper and 85.9% for gold at an optimum grind of 75% minus 200 mesh.

Achieving those recoveries will be important, Nikic pointed out, as about 60% of revenues will be from copper and 40% from gold. The oxidation levels do not significantly impact on gold recoveries.

With capital costs of about $135 million, Imperial and partners plan to build a mill on the property that will produce a concentrate from a crushing, grinding and standard froth flotation circuit. No cyanide will be used.

There are no accessibility problems, no anticipated problems with acid generation, and the project is well situated with respect to power, mine services and an experienced workforce. Support by local residents is considered to be positive.

The mineable reserves are contained in three zones separated by low-grade mineralization that can be mined by a single open pit with a strip ratio of 1.9:1. Although a fresh snowfall made travelling around the property somewhat difficult during a recent visit by The Northern Miner, it was obvious the moderate topography is well suited for open pit mining. In addition, much of the property has previously been logged.

Because of the extensive work that has been done on this property to date, Wright Engineers will have a large volume of information for its study. This include the results of more than 200,000 ft of core drilling (528 holes); 85 bench scale metallurgical tests; independent reserve estimates; geotechnical investigations and testing of the open pit site, waste dumps and tailings storage facility and waste and acid generation tests. Imperial is preparing a report to the British Columbia mine development steering committee, completing environmental monitoring and independent milling tests and pilot plant testing of 130 tons from five deep trenches.

Nikic said the feasibility study is meant to produce a bankable document to be used for project financing.

“The future of this company depends on this project,” he said. “It will give Imperial the status of a mining entity that it has not had before.”

Nikic noted that Mount Polley will represent the first of several advanced projects being developed toward production by companies in the Imperial Group. Imperial Metals has the larger stake in Mount Polley. However, other entities in the group collectively hold a 27.95% interest.

Although the project will be sensitive to metal prices and exchange rates, Imperial is expecting a payback of about three years.

“We are lucky that the logical mining sequence gives us a higher gold grade for the first five years,” said Nikic, adding that gold production would average 100,000 oz annually in this period.

According to Imperial’s site geologists, the Mount Polley property still has considerable exploration potential for expansion of reserves.

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